G20 to include "non-market policy" in global imbalance agenda China refuses to join dispute to reflect economic model

The U.S.-hosted G20 meeting of finance ministers and central bank governors ended on September 1 in Ashville, North Carolina.Statement by the G20 chairman of the US Treasury DepartmentThe meeting showed that the parties formally incorporated “non-market policies and practices” into the global imbalance agenda, demanding that economies with excessive and persistent external surpluses reduce policy distortions that suppress domestic consumption and make growth overly dependent on exports.

This means that this G20 debate has gone beyond traditional tariffs and bilateral trade frictions.The issue is being redefined: If a large economy relies on state-led industrial expansion, low consumption and external markets to absorb continuously increasing production capacity, then its domestic policies will no longer be just “internal economic choices” but may be a global source of imbalances that other countries need to cope with.

Luther had previously continued to pay attention to U.S. Treasury Secretary Scott Bessent's remarks on China's economic model, supply chain dependence and "risk deduction" under the G20 framework. Luther has summarized it as a broader "risk deduction" trend, which belongs to the media analysis; but the U.S. Treasury Department's official statement of the G20 chairman shows that discussions about "non-market policies", external surpluses and insufficient domestic consumption have entered multilateral policy documents, and no longer just U.S. unilateral accusations against China.

The G20 chairman noted that excessive and persistent global imbalances would create economic distortions and overseas flooding, increase the vulnerability of the economy and supply chain, and could lead to disorderly adjustment risks.The statement suggested that surplus economies should remove distortive policies that restrict domestic consumption and cause growth to be overly dependent on exports, while deficit economies should increase domestic savings and promote fiscal rectification.

The statement did not directly refer to China.Reuters reports on the meeting.The report noted that the U.S. viewed China’s continued expansion of export surpluses, industrial subsidies and outflow of capacity as important sources of global imbalances, and warned that low-cost exports would shift domestic adjustment costs to other economies.

What is really sensitive to Beijing is not the three words “trade surplus,” but rather a core contradiction in China’s long-term economic governance: governments can rapidly expand investment and manufacturing capabilities through administrative resources, financial systems and industrial policies, but it is difficult to synchronize the role of residential consumption in the economy without affecting the existing interest distribution structure.

U.S. Treasury Secretary Bessent has repeatedly publicly urged China’s economy to reduce its dependence on manufacturing and exports and shift to more dependence on domestic consumption. The U.S. Treasury Department’s policy document released this year also listed “global imbalances” as one of the core issues of the 2026 G20 financial track. If this policy direction continues, the focus of future economic policy towards China may shift from simply discussing “whether trade is fair” to asking whether countries should continue to bear external costs arising from China’s domestic policy choices.

Beijing has denied its intention to pursue a trade surplus.The Governor of the People's Bank of China, Ban Yongzhi, said after the meeting.China insists on expanding domestic demand andining a high level of openness, and argues that both surplus and deficit countries need to address global imbalances through structural reforms.

China has not joined the consensus, so it has stronger signals than the general diplomatic slogan. It shows that Beijing at least currently does not accept the issues of industrial policy, consumption structure and export dependence jointly defined by other G20 members. If this disagreement persists, it may push economies such as the United States, the European Union, Japan, Canada and others to adopt more tariffs, subsidies review, investment restrictions, supply chain localization and industrial defense tools, rather than wait for China to proactively re-balance.

Global imbalance is not an abstract macro indicator, it corresponds to specific policy choices: who decides on the flow of credit, who decides on local governments and state enterprises to continue to expand capacity, who bears the cost of adjusting real estate and local debt, why resident income and social security are not enough to support stronger domestic demand, and who decides to continue to rely on export release pressure when domestic demand cannot digest capacity.

But strict distinction between facts and judgments is needed.The G20 chairman’s statement is a policy coordination document, not a compulsory sanction or judicial decision; China has not joined the relevant consensus, nor is it equivalent to other members having formed unified trade measures with China.

The next step that is truly traceable is whether the speech translates into concrete policies: whether the IMF intensifies monitoring of China’s external surpluses and insufficient domestic demand, whether the United States and its allies adjust tariffs and industrial policies accordingly, and whether countries begin to view China’s subsidies, capacity and supply chain issues as a common systemic risk rather than deal with bilateral trade disputes separately.

If this shift continues to deepen, the pressure on Beijing will not only come from “too much exports,” but from a more fundamental question: whether the CCP is willing to change the growth pattern dominated by the party-state system of capital, industry and wealth distribution.